An introduction to U.S. macroeconomic policy issues, such as how we use monetary and fiscal policies to promote economic growth, low unemployment, and low inflation.

Saturday, September 26, 2009

California's Budget Crunch: The Universities Protest

Faculty and students protest state budget cuts, tuition fee increases and the University of California administration's handling of the California budget crises during a rally at the University of California Berkeley. (Robert Galbraith)

In the September 25, 2009 TIME magazine article "California's Budget Crunch: The Universities Protest," Kevin O'Leary reports that significant spending cuts to California's university system are prompting objections from citizens. This suggests that many people do not understand the concepts of tradeoffs. Californians pay less in taxes as a result of popular propositions, yet object to reductions in government services than are necessitated by reduced revenues.

Thousands of students, faculty and staff boycotted classes and staged rallies across the 10-campus University of California on Thursday to protest dramatic cuts to the system's budget and proposed additional hikes in undergraduate fees. At UC Berkeley, the flagship campus and home to famous student protests during the turbulent 1960s, an estimated 5,000 students, professors and university staff attended a noon rally at Sproul Plaza during the system-wide "Day of Action." At UCLA, about 700 people gathered at Bruin Plaza and at normally placid U.C. Irvine approximately 500 people attended the noon rally. One protester held a sign that read: "If I wanted to go to a private school, I would have been born into a rich family."

The University of California Regents, stung by a 20% cutback in state support due to the state budget crisis, are planning to increase student fees another 32%. The U.C. system must chop $637 million out of its budget this year following the agreement between Gov. Arnold Schwarzenegger and the legislature on how to close California's massive $26 billion shortfall in July. Many of the protesters believe the constant increase in fees over the past decade is endangering the university's mission as a public university that offers students an outstanding education at a cost that middle- and working-class families can afford.

U.C. Irvine Humanities Lecturer Keith Danner gave an idea of the cuts in his division alone. "On July 1, 2008 we had 80 full time support staff. On July 1, 2009, we had 67 full time staff and with another 26 layoffs coming we will have 41 staff or a 50% cut. These are the people that make departments run." There are rumblings among faculty and staff that the university is top heavy with administrators often paid more than $100,000. Yet while critical of the U.C. administration for not being more transparent in its approach to budgeting and for paying football coaches more than Nobel Prize winners, the protesters know the real problem lies in Sacramento.

"It's not just an economic crisis," says Shannon Steen, a U.C. Berkeley professor who helped form Save the University to protest cuts to the budget, "it's really a political crisis around the two-thirds rule in the legislature that holds the state hostage to a minority of legislators who are not doing what the people of California want." California is the only state in the nation that has a two-thirds requirement for the passage of tax increases and to pass a budget. These two rules are at the root of the state's chronic budget woes.

U.C. Irvine Anthropology Professor Victoria Bernal spoke passionately to about 125 students in the Social Science quad, saying "the beauty of the University of California is that that it is an elite intellectual institution, but it is not elitist. If there were huge problems with the University of California, that would be one thing. Instead, we are taking something that by all measures is a great success and tearing it down." Student leader Isaac Miller says the university community came together to "protest the de-funding of public education by the State of California and the crisis of priorities of the university administration." "It was stunning," says Steen. "In the 20 years since I was an undergraduate here, I have never seen anything like this."

"This is not about money. It is about values," said Bernal "Anything we do costs money. The question is: what are our priorities? Public education is a fundamental cornerstone of democracy in America. Without it only the well-to-do will receive the education and skills you need to take leadership positions in society." When Washington Monthly's annual college rankings, released this month, rated 258 universities according to contributions to the public good, U.C. Berkeley came in first, U.C. San Diego ranked second and UCLA ranked third. The rankings are on three broad categories: social mobility (recruiting and graduating low-income students), research (producing cutting-edge scholarship and PhDs), and service (encouraging students to give back to their country.)

The demonstrations did not disrupt schoolwork. A spokesman for UC President Mark Yudof said most classes were held and that "most of the action was at the rallies." But there will be more rallies. Protest organizers at Berkeley said that discussions are under way for a march on Sacramento that would include participants from the UCs, the 23-campus Cal State University system and the states' junior colleges. "This is just the beginning," says Miller. "It's a wake up call to students about what is happening to their education."

2 comments:

Education system got too old and students lost motivation to study and gain vital skills, high education has lost it's status value and became too expensive. It's not a surprise that students get help of professional dissertation writers and stay away from school/ college without good causes. Good education is worth investing in but where is the good one?

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Comments

I welcome comments. Please keep them civil, short and to the point. Obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules.

The following information is provided to help you understand the biases that may be inherent in this blog.My primary U.S. economic policy concern is the fiscal irresponsibility of government.The Baby Boom generation, which I am part of, has spent the past 30 years accumulating massive public debt that will be passed to our children, grandchildren, and subsequent generations.I am not opposed to the reduction or elimination of any government spending program.Yet, politicians tend to call for reduced spending in general terms and fail to publicly declare specific cuts they would make.The primary cause of the massive U.S. public debt is revenue reductions (in the form of tax cuts) without similar decreases in government spending.

I am willing to consider the expansion and addition of government programs as well.I do not mind how much or little the government provides to society as long as it is paid for.I am willing to pay higher taxes for services deemed worthy, whether they be national defense, homeland security, or income assistance to those less fortunate than I.And I am certainly willing to pay less in taxes or to deposit any government check I receive.My generation, the Baby Boomers, has been very good at cutting taxes and increasing the size of government, regardless of which political party is in power.This is a prescription for financial chaos that remains a horrible legacy for future generations.

About Me

I am a professor of economics at Jacksonville University, where I teach courses in introductory economics, comparative economic development, and globalization. I use this blog to keep in touch with my current and former students. Teachers and students at other schools, as well as others interested in economic issues, are welcome to use this resource.